The effect of foreign remittance on timber imports: Evidence from Nepal

This study investigated the impact of foreign remittance on timber imports in Nepal, a developing country with high remittance flow, using time-series modeling. The results indicated a positive long-term relationship between foreign remittance inflow and both roundwood and sawnwood imports. However, a negative long-term relationship was observed between timber imports and GDP growth, suggesting that the import-based timber industry hasn't created a comparative advantage in the timber market. The short-term models showed that the domestic demand for sawnwood is more stable than for roundwood. The study suggests that as foreign remittance and the national economy grow, ensuring a steady supply of quality, cost-effective sawlogs from domestic producers could support the timber industry's growth, reduce dependence on foreign timber products, and help lower national trade deficits in the long run.